Blog Entry

Why Both Healthcare Plans Fall Too Short

Posted on: October 23, 2008 6:46 am
Edited on: October 23, 2008 6:47 am
So I'm going to take a break from my regularly scheduled football blog to bring you this political announcement, what glitters isn't always gold.  Okay, I stole the line from "All the Gold In California".  However, both the Republican and Democrat candidate have each laid out their plans for healthcare that's suppose to make us, the voters salivate at the thought of what we could have should we elect one or the other.  The problem is, they both fall seriously short of addressing the cause.  Okay, neither one of them are universal healthcare or even corporate sponsored healthcare, so let's not go with that argument.

What are my credentials in being able to determine this?  Well, one, I don't support either candidate, so I can write this a little objectively.  Another, for the majority of my career, after leaving the Air Force, I've been working with health care insurance in one way of the other for most of my after service career. 

When I left the service and after I had my daughter (hard to get a full-time job when you're pregnant), I ended up as a medical claims examiner for five different HMO's in California.  Our office had the contract to administer the claims for health maintenance organizations, which was just emerging at the time.  While we dealt with the physicians and paying them, we also dealt with the patients whose claims we denied.  The HMO's themselves were the ones who dealt with the companies and corporations and the various plans offered.  As claims examiners, we had to be aware of each plan and the coverage under each plan. 

When I returned to PA, I eventually got a position as an assistant to the director for a state grant funded center.  Although we were covered under the state employees health plan, each month I had to submit our monthly premium requisition to the person overseeing our finances and funding.  Next to our monthly rent, the centers cost of the health care premiums were the highest portion of our monthly costs.

I went back to college and took every computer programming/it class available and did the same with business classes and human resource classes.  Once I got out, I got a job with a, you got it, an HMO...a medicaid HMO specifically.  Boy do I miss the profit sharing checks.  When I moved south, I ended up on the other side, medical billing software, my expertise in claims examining and insurance payment programming was one of the reasons I was hired.  So I'd say I have about 14 years dealing with medical insurance in some fashion or another.  So there's my qualifications, take them for what you will.

Let's discuss the health care plans.

John McCain has several steps in his program.  He wants you to have the ability to go across state lines and be able to purchase health insurance on your own.  He'll give you a 5,000.00 tax break if you do this.  Of course, if you don't do this and have the gold plated cadillac plan paid for by your employer, then you'll be taxed.  Sounds logical on paper.  Competitive pricing brings down costs of premiums.  If you're getting more then the "normal" tax payer, then you should pay taxes on the unneeded or optional benefits.  Government would not be involved in the administration of the policies or premiums.

Barrack Obama would allow you to keep your current employer paid health insurance if you wish, or you could purchase into the same health insurance pool that the federal employees and members of congress gets (my guess, Federal Blue Cross/Blue Shield).  Employers (can't determine if it's rich employers or large companies like Hewlitt Packard) would be fined for not providing some sort of health insurance for their companies (I'm guessing large companies since they're premiums would be smaller then small, rich companies due to the payer pool).  Of course, children would be required to be covered under some type of insurance.  Sounds good on paper too.  Those who don't have health insurance can buy into plans in a large insureds pool at a much lower cost, then if they were to attempt to get it on their own.  Large companies for the most part, already offer some sort of insurance benefits and have access to the reduced premiums per person due to insurance pools, so they're not actually at a risk of being fined. 

Yep, both on the face look like viable plans that begin to address the problems, however, they fall very short and really don't address the rising health care costs. 

Niether plan really will lessen the effect of rising health care insurance.  Niether plan addresses the working poor and middle class who don't actually have the extra money to buy into it.  Under McCain's plan, you have to have the out of pocket money first to buy into the health insurance before you get the $5,000.00 tax deduction.  Under Obama's plan, it will be mandatory to insure your children, what happens if you're making just enough to cover your monthly expenses?  Where does the extra money come from.  Niether guarantees an increase in salary for compensation of the shift or loss of benefits under your employer. 

If you've ever been on COBRA, you kind of get the idea of exactly the cost of your health insurance premiums between what you put in and what your company puts in.  COBRA is a program that affords employees the ability to continue their health insurance should they leave their employer.  For one year, you're able to buy into your companies plan for full cost of the premium.  My mother was on COBRA when she switched jobs, until her new employers benefits kicked in.  Her monthly payment for just herself was $365.00 a month.  The place she worked for had been part of a larger insureds pool.  It could be more for someone working with a small company. 

So what's wrong with John McCain's plan?  Quite a bit actually.  First off, the McCain campaign has already stated that the goal is to have all persons on private insurance so that businesses wouldn't have to carry it.  However, in the field of health insurance, competitive pricing doesn't work the way he thinks it will.  Look at the major insurance carriers, AETNA, CIGNA, US Healthcare, the Blues.  Their national but their pricings are based on the area of service.  In other words, a state that has a lower cost of living rate, is going to have lower premiums and lowered adjusted fee schedules for their physicians.  So what's the logical thing for a company whose sole purpose is to make a profit (and make no mistake, that's the insurance companies sole objective), raise prices to match the highest cost of living.  What about these smaller companies.  Well, there are thousands of health insurance companies out there, aren't there?  Well, about 1/4 of them are pre-pricers for larger insurance companies, like AETNA, CIGNA, etc.  Others are just another plan under the same insurance companies. 
So, what's to stop them from eliminating them to give you fewer options?  So the idea of competitive pricing may just turn around and bite us in the butt.

Okay, so they don't raise prices and they don't eliminate their smaller branches.  Now you have the question of state regulation.  The insurance companies set up offices in individual states because there are state regulations that govern how they operate, what they have to include.  Obama is at least correct when he talks about that.  Okay, so they are willing to conform the plan to the different state insurance laws, alot of insurances require you to see an in network provider to get the full benefit of the plans with lower out of pocket fees and copayments.  First off, physicans are not required to accept insurance.  In fact, alot of physicians will accept the major insurance carriers but the smaller ones, they'll ask you to pay up front and then you file the claim to your insurance company for reimbursement.  What's the chances of your physician agreeing to accept the in-network rates of an insurance in Arkansas, if you live in NYC?  My husband and I ran into the issue of fee schedule differences when it came to workers compensation. 

As far as taxes go, McCain says those that are only going to be taxed are the ones with the cadillac plans.  The one that offers cosmetic surgery and transplants.  There's a term that insurance companies use to get away with not paying claims "not a medical necessity".  If there's a plan out there that offers cosmetic surgery as an elective surgery, congress must be the only one that has it, and I suggest that we re-evaluate exactly what benefits our elected officials are receiving.  My insurance plan allows for breast reconstruction surgery, but I have to have had a masectomy done to get it.  I can have breast augmentation surgery to reduce the size of my breasts, but I have to have medical proof that the size of my breasts are effecting my health or keeping me in constant pain.  Same with plastic surgery, I can have it, if I've been burned or disfigured due to an automobile accident.  I dare anyone to go to their insurance company and ask them if they'll pay for a nose job.   However, because I have these options in my insurance, I'll be taxed on this, or even be left without it, since the idea is get everyone on private insurance.

As far as Obama's plan.  Well for the most part, it actually is a better plan since it does allow for large insureds pool that will drop individual premiums.  It doesn't require you or your employer to drop your insurance.  It doesn't even require your employer to pay full cost of your insurance.  It does however set up a need for the government to administer these pools, or at least contract out someone to administer it for the government.  It also leads to questions as to whether premiums would be supplemented with taxes or would it be like the COBRA program where the insured pays the full cost of the premiums.  Will this enlarge the office of health and human services or will this create another government office.  This is the biggest drawback of his plan.  With the larger pools, who would the insured contact as their benefits administrator for issues between them and the insurance companies.

Though both plans offer alternative options, neither would stop the rising cost of health insurance and health care prices.  One plan may hurt the individual insured more while the other would put more of the burden on the taxpayer.  Like I said, they both fall short.

Category: General

Since: Mar 14, 2008
Posted on: October 26, 2008 9:38 pm

Why Both Healthcare Plans Fall Too Short


Looks like you hit a hot-button issue here - thanks for the response.  I do technical work (phone systems, data networks), and naturally some of our clients are doctors, so I understand the overhead costs of going into business.  I have also experienced a denial of claim for something that was not only covered, but pre-approved by the insurance company!  So yes, at some level there is a need for government oversight, but not FEDERAL government oversight.  In my case, I called the state Insurance Comissioner's office, and within a couple of hours the insurance company called me to say they would cover my claim.  I should have pursued the matter further, because it was then that I learned firsthand that the government and BIG BUSINESS walk hand-in-hand down the path to riches. 

I actually don't fault the private companies that are, as you mentioned, in business to make money.  I do fault the government that is supposed to protect the citizen from the "tyranny of the majority", and enforce private contracts, which is what insurance coverage is.  I think the truth is that the majority of elected officials are on the take, and if we keep sending them back to their gilded towers, they will continue to take money under the table from special interests.  That is why my personal policy is to vote against any incumbent, unless I know enough about him/her to know that he/she has my best interest at heart.

A very interesting and thought-provoking topic.  Thanks for  breaking from your norm!

Since: Sep 9, 2006
Posted on: October 26, 2008 9:00 am

Why Both Healthcare Plans Fall Too Short


I'll agree that we need less government involvement, and if it were truly competitive then there shouldn't be an issue.  But how competitive is an industry that has it's own lobbiests? 

No doubt the government has bogged down the VA.  Not sure about the entitlement minded though as to whether to argue it or not.  If there is one group that we should be responsible for are the promises we've made to the men and women who have served and were hurt for their country.  I think the push/pull that the VA has gone through in politics have created a lot of problems.  The cuts, the attempts to privatize, etc.

However, without some government involvement then we have a major chance of the debacle of Walter Reed occurring again.  It came out after the conditions of Walter Reed Hospital and what the troops were returning to, that Walter Reed had been placed in the hands of private contract company (out of South Carolina) long before the conditions were exposed.

There has to be some kind of happy medium between the two.  Where government is not too involved, but where we're not going to be completely niave to believe that left to their own devices, the insurances companies will remain competitive. 

Since: Sep 9, 2006
Posted on: October 26, 2008 8:49 am

Why Both Healthcare Plans Fall Too Short


LOL..Randy and the Rainbows...

Yep, you're correct, and it's about the same now.  Proof...ask a man when the last time he went to the doctors was (just teasing).   The problem comes is when we delay our own health care to the point where it now takes extensive tests and treatments to "cure" the illness.  Example, letting an infection go for so long that it takes more treatments then a 7 day bottle of pennicillian or ampicillian.  .

Since: Sep 9, 2006
Posted on: October 26, 2008 8:41 am

Why Both Healthcare Plans Fall Too Short


I understand now and thanks for the info.

Actually it is getting a little more concerning about the number of physicians that aren't taking new patients or are limiting their new patients to certain types of insurance (or self pay).

I actually have to drive an hour to visit an audiologist that takes insurance.  The one's in my city won't take it and require cash up front and then you can file to your insurance for reimbursement. 

Since: Sep 9, 2006
Posted on: October 26, 2008 8:38 am

Why Both Healthcare Plans Fall Too Short


I disagree that we need a national healthcare system, but I agree that we do need some type of system that will allow individuals to get insurance at a reasonable cost. 

Right now, children who are on welfare can get Medicaid, it takes awhile to get it, but they can still get it.  Same with women who are pregnant and on welfare.  There's already a program in place for children who are low income but families are working.  It's called CHIPs.  Childrens Health Insurance Program, is a federal government program, administered by the states that allow families to buy into an insurance pool in that state based off of income. 

The elderly have Medicare, and if they've no assets could be eligible for Medicaid as a secondary. 

Where the issue is are the adult individuals who aren't eligible for either programs.  The self-employed who have to pay in high monthly premiums, or those not covered under an employer provided package.

No doubt, we do deny ourselves health care because we may not be able to afford it.  Would I go for my annual mammogram this year if it weren't covered by my health insurance, probably not because I don't have the extra money it would take to pay for the full price of it. 

Since: Sep 9, 2006
Posted on: October 26, 2008 8:27 am

Why Both Healthcare Plans Fall Too Short


Not sure exactly why insurance premiums are so high.  Could government regulation cause some of the increase...yes.  However, don't forget, primary purpose for insurance companies...profits. 

Completely deregulate insurance  It took the government to step in to have insurance companies cover costs of childrens immunizations.  Before the government stepped in majority of plans did not include the cost of mammograms for women.  Ever have to argue a claim with an insurance company even when it was on your plan?  What happens if an insurance company takes your premiums, denies your claim and then closes up and runs off with the money?

Remember when I said I miss my profit sharing...I think I had at least 4 profit sharing checks (they came quarterly) while working with the insurance company.  One completely paid for a trip for my daughter and myself to Disneyworld for a week (including air fare), another bought a computer (when they were expensive), another one gave me 2K towards the purchase of a used car and, another one, let's just say made for one heck of a christmas for my family. 

Now add to the costs of rising healthcare.  Doctors require more then just a medical degree and business license.  There's the initial costs of starting a practice.  They have office space to rent, utilities to pay, staff to pay.  They have equipment to purchase.  Any doctors office to be competitive, needs a computer system in these days.  Even if it's just for their billing.  Most insurance companies prefer electronic claims transmissions.  Even if you chose to enter the claims manually online, depending on your case load, you have to pay someone to manually key these in.  I could go on, but I think you get the jest.   Now given that doctors have seen a substantial decrease in what they're paid for on their services to Medicare patient (a doctor may see $45.00 on a 90.00 office and then the patient is responsible for 20% of that), and that alot of doctors are carrying extremely high self-pay patients A/R going unpaid for 150+ days.  (One doctor I know has 125,000.00+ in patient A/R that is over 180 days old). 

As far as malpractice insurance, I think it's wise for doctors to have it.  Doctors do screw up (although she never sued, my mother nearly died during a botched operation) and patients should have some recourse (not to the extent where it is now).  Prior to the insurance, those patients who truly had a case were left with loads of medical bills while some doctor's filed bankruptcy and went in business somewhere else. 

There's just so much involved in lowering the costs of healthcare that just having plans to offer individuals insurance doesn't address the full extent of it.  

Since: Sep 9, 2006
Posted on: October 26, 2008 7:44 am

Why Both Healthcare Plans Fall Too Short


I understand the fear of the step toward socialized or nationalized medicine.  And yes, if Obama's plan is implemented, it would become one step towards that because it opens up one plan for about 46 million Americans (American Medical Association estimates), to be under one umbrella plan and put the government in direct involvement of administering this.  It's not completely universal health care, since it still allows for individuals to keep the health care they have.

However, there's not as much competition in the health insurance industry as one may think.  The Blues are the blues, are the blues...yeah, there's plans under the "various" blues but they're ... still the blues.  The Medicaid HMO I worked for in PA, is the same MCD HMO in Tennessee, as the same HMO in South Carolina...all different names, same company though that's administering them.  

Since: May 11, 2008
Posted on: October 25, 2008 5:57 pm

Why Both Healthcare Plans Fall Too Short

Whatever the plan is, you can't have government involvement. If you want to screw something up, hand it over to the government. I'm treated to the most bloated bureaucracy in the government - the Veterans Administration. If you develop a bureaucracy, you populate it with entitlement-minded bureaucrats... a pervasive attitude more contagious and destructive in the VA than the ebola virus.

Competition is, and always will be, the answer. You can see the results in private schools where their administrations are competing for mom and dad's money. You either adapt, or you fail. With the threat of shared failure comes the promise of shared success when there is teamwork and enthusiastic zeal. Employees need to know they're going against a competitor - that gives them the impetus to achieve.

Since: Mar 21, 2007
Posted on: October 25, 2008 11:36 am

Why Both Healthcare Plans Fall Too Short

Oh Dennn issse scooby doo ... I'm in luv with you Dennn issssse scooby doooooo ... aHa ha ha !

The biggest problem, and this has been going on for decades, is determining the premium cost versus who actually uses their insurance. And this applies to home; car; and people. When I worked, back in the '70s, for Blue Cross and Blue Shield; I was befriended by one of the VPs and he revealed to me, "'d be surprised at the percentage of people who NEVER make a claim !?! It's way over 50% ... overwhelmingly over 50% !"

There lies the rub !

Since: Apr 16, 2007
Posted on: October 24, 2008 11:27 am

Why Both Healthcare Plans Fall Too Short


Here is what I was refering to when I was referring to doctors going off the insurance grid:

Excerpt from Newsweek:

From Feb. 7 2005 issue - Two years ago, Fred Perenic decided the doctors in his health plan weren't worth a dime. "It was hard to get an appointment, and I never saw the same guy twice," says Perenic, 53, the president of a Detroit manufacturing company. At the doctor's office "everyone was always in a rush. It was maddening." So Perenic signed on with Dr. John Blanchard. For a $5,000 annual fee, Blanchard provides Perenic with a yearly three-hour physical, same-day appointments and his personal cell number. Blanchard also calls on Perenic at work to monitor his blood pressure. The price is steep, says Perenic, but for the first time in years, he feels taken care of. Having this much time with a physician, he says, "is almost a guilty pleasure."

Overcrowded offices and overworked physicians have made a trip to the doctor feel like more than a hassle: it's dispiriting. Now, a small but growing number of doctors, clinics and hospitals are offering premium service to elite customers—and affluent baby boomers like Fred Perenic are shelling out big bucks to get it. About 250 so-called "concierge physicians" exist in the United States today: these are primary-care doctors who charge an annual retainer in exchange for same-day appointments, unhurried exams and house calls. The Cooper Clinic in Dallas, whose tab is $3,000 for an eight-hour physical exam, has seen its client base grow 45 percent in the last four years. Baltimore-based Pinnacle Care International charges members between $5,000 and $25,000 a year, in addition to a hefty initiation fee, to keep track of medical records and coordinate health care. Members can get fast-track appointments with overbooked specialists, too.

Health-care experts who fret that too many medical resources are already being spent on too few say the new trend only makes matters worse. Forty-five million Americans live without health insurance. The growth in high-end medicine "is yet another stark inequity in an already unequal system," says David Magnus, a biomedical ethicist from Stanford University. Concierge docs defend boutique care, saying it frees them up to do their jobs right. "I can afford to take the time I need to really listen and get to know each person," says Blanchard. The pay is good, too. While primary-care doctors, on average, make $140,000 a year, Blanchard, who has capped his practice at 100 patients, could make $500,000 before he even picks up a stethoscope. Top specialists find room in their busy schedules for deep-pocketed Pinnacle members, says COO Rick Kramer, because "these patients can pay for their services outright."

There seems to be no limit to what aging boomers are prepared to spend. At Dr. Dan Cosgrove's WellMax clinic in southern California, patients pay up to $9,000 for what may be the most exhaustive physical examination available outside of a medical examiner's office. For three days, WellMax patients get routine tests and blood work, as well as more esoteric exams that measure cognitive function, plaque buildup and genetic vulnerabilities to heart disease or cancer. In three years, Cosgrove's practice has grown from 50 patients a year to nearly 500. "Is it health care for the rich? I guess so," he says. "But when you come to my clinic, I'm not concerned about the national health-care picture. I'm concerned about you."

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